OPEC’s Oil Output Drops for the First Time Since July

• Reuters: OPEC’s crude oil production dropped in November for the first monthly decline since July.
• OPEC produced 27.81 million barrels per day of crude last month, a drop of 90,000 bpd compared to October.
• In November, Iran, which is exempted from the OPEC+ cuts, further increased its output to a five-year high, according to the Reuters survey.

OPEC’s crude oil production dropped in November for the first monthly decline since July as Nigeria and Iraq saw lower shipments, the monthly Reuters survey found on Wednesday.  

OPEC produced 27.81 million barrels per day (bpd) of crude last month, a drop of 90,000 bpd compared to October, the Reuters survey of OPEC sources, consultants, and vessel-tracking companies showed.

In the three months before November, OPEC’s oil output was either flat or rising as growing supply from African members and Iran largely offset lower output elsewhere.  

In November, Iran, which is exempted from the OPEC+ cuts, further increased its output to a five-year high, according to the Reuters survey.

Oil production from the 10 OPEC producers part of the OPEC+ pact declined by 130,000 bpd in November from October, with Saudi Arabia and the other Middle Eastern producers keeping strong compliance with their announced cuts and extra voluntary reductions, per the survey.

Early next year, OPEC’s oil production is expected to further decline after the OPEC+ alliance agreed extra cuts for the first quarter of 2024.

Overall, the announcements after last week’s meeting were underwhelming and failed to convince the market that OPEC+ hasn’t had disagreements over cuts and quotas leading to the meeting, as became evident from the lack of a group-wide cut.

The OPEC+ group is ready to take additional measures and deepen the oil production cuts in the first quarter of 2024 to avoid volatility and speculation on the market, Russia’s Deputy Prime Minister Alexander Novak said earlier this week.

Novak’s comments on Tuesday follow remarks from Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman, who told Bloomberg on Monday that the OPEC+ production cuts could extend beyond March 2024 if the market requires it. The minister also criticized commentators for failing to understand the output deal.

By Charles Kennedy for Oilprice.com

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